Positive trend in business development continues

Sunways AG’s (FSE: SWW; ISIN DE0007332207) sales from continuing operations – i.e. after deduction of the sales volume attributable to MHH Solartechnik GmbH, the subsidiary scheduled to be sold – rose by 9.1 % against the prior year period to € 39.4 million (Q3/2008: € 36.1 million). EBIT improved palpably and amounted to € -0.6 million in the third quarter 2009 (Q3/2008: € -1.1 million). At € -0.9 million, the after-tax result from continuing operations for the third quarter 2009 slightly increased against the after-tax result in the prior year period (Q3/2008: € -1.0 million).

Consolidated sales from continuing operations for the first nine months of 2009 rose by 9.6 % against prior year period sales to € 122.7 million (9M/2008: € 112.0 million). EBIT, however, declined from € -0.7 million in the 2008 nine-month period to € -6.1 million in the corresponding period of the current fiscal year. Despite the marked decline in selling prices for solar components, the cost of materials ratio of Sunways AG remained stable compared to the third quarter 2008 as well as to the 2008 nine-month period. Sunways AG’s cash-flow from continuing operations improved significantly and amounted to € 6.4 million in the 2009 nine-month period. The after-tax result from continuing operations was € -5.6 million (9M/2008: € -1.1 million). This corresponds to earnings per share of € -0.49 (9M/2008: € -0.10).

Highly dynamic demand in the third quarter Following a very difficult start to 2009 throughout the industry, sales of Sunways AG increased markedly in the second and third quarters so that the business development improved. Dynamic changes in demand could not be fully exploited as Sunways too was unable to secure the additional module capacities required in this respect.

Solar cell segment: Overproportionate rise in earningsSales in the solar cell segment slightly declined by 3.1 % against the prior year quarter to € 18.5 million in the third quarter 2009. However, EBIT improved from a negative amount of € -0.7 million in the third quarter 2008 to a positive € 2.5 million in the period under review. Segment sales in the 2009 nine-month period rose by 24.3 % over the comparable prior year period to € 73.7 million € (9M/2008: € 59.3 million). EBIT reached € 2.5 million and thus recorded a marked increase also for the first nine months of 2009 (9M/2008: € -2.3 million). This turnaround in earnings in the solar cell segment was largely due to a substantial decline in the cost of materials against the previous year.

Systems segment: Module sales doubledSales from continuing operations in the systems segment rose by 22.9 % against the third quarter 2008 to € 20.9 million (Q3/2008: € 17.0 million). This rise in sales was mainly due to the solar module sales volume which more than doubled. EBIT decreased from € -0.4 million in the third quarter 2008 to € -3.1 million in the third quarter 2009. Segment sales in the 2009 nine-month period declined by 7 % to € 49.0 million (9M/2008: € 52.7 million). EBIT in the period from January through September 2009 decreased to € -8.6 million (9M/2008: € -1.6 million). This decline in earnings was mainly due to weak demand throughout the industry during the first quarter 2009, the massive reduction of selling prices for modules and inverters during the past 12 months as well as the fact that the inverter business in Spain almost came to a complete halt in the wake of the new feed-in regulations.

Outlook for the entire fiscal year 2009Sunways AG expects the positive sales development to continue in the last three months of the fiscal year 2009. Short-time working at our two production sites has already largely been suspended. Based on the continuously rising national demand as well as first signs of recovery in the Spanish PV market, we anticipate stable price developments and, in this context, an improved sales and earnings situation at Sunways AG in the fourth quarter. Furthermore, the book gain resulting from the sale of MHH Solartechnik will have an additional positive effect on net income in the fourth quarter 2009. The disposal of MHH is part of a strategic transaction in the context of which Sunways AG and BayWa AG have also agreed on the formation of a joint project development company for large-scale solar systems and solar parks. Through this now further enhanced strategic and operational basis we will continue the initiated positive development trend of Sunways AG.